When economists look at issues like purchasing power, teens stand out as a financial force to be reckoned with, and this is evident if you watch the ad. Easily swayed by factors such as peer pressure and perceived coolness, teens are a market that is just there to be tapped, and that is reason enough for parents to worry. Add to that the risk of giving your teenager access to their own money to spend on their own and it can look like a disaster on the way.
Of course, deciding that your teenager is not ready to manage his own finances, even to a limited extent, is a choice that comes with its own risks, namely that he will not learn the necessary lessons that will enable him to do so. take on the chores when they leave home to live independently, so teaching them these skills is really non-negotiable.
If you’re feeling nervous about the prospect, however, you’re not alone, and luckily there are plenty of ways to start small.
Practice saving together
Economic measures suggest the average teenager spends more than $ 2,000 a year, but just because that’s how math changes at the population level doesn’t mean your teen does or you can imagine having that kind of disposable income to spend on your kids.
In fact, many families with teenagers work hard to save money, either out of necessity or because they want to make sure they have a safety net for medical issues, for college, or for retirement. another reason – and it’s a great place to get your teenager involved.
By their nature, neurologically, saving can be difficult for adolescents. They don’t have the ability to long-term plan and manage their impulses because their frontal lobes aren’t fully developed yet, and that’s okay.
This is why, as a parent, your advice is so important. If you’re trying to save money for your family, engage your teen in price comparisons, help them make shopping lists and budgets, and explore low-cost or no-cost family excursions. Have fun and consider setting aside different savings for your family to enjoy together, like money for a fun day trip, so your teen can experience the satisfaction of successfully saving.
Practice paying with cards
It used to be a lot easier for parents to teach their teens to budget or even young adults themselves to manage their money because if you didn’t have money in your wallet you wouldn’t. were out of luck. You had to plan very carefully. In an age of ubiquitous credit and debit use, however, this skill may seem odd.
Help your teen practice managing their balance, saving money, and spend wisely with a teenage debit card. These cards offer immediate parent spending alerts, cash back rewards like traditional cards, and easy monitoring to make sure your teen isn’t in financial trouble.
What about credit cards? Usually, there is no reason for your teen to have access to your credit cards or having their own credit card, especially since many don’t really understand how credit works.
However, it is important that you provide some credit education, especially as your teenager gets closer to leaving college. While it is no longer legal for credit card companies to inundate college students with credit card applications as they once did, student loans are often one of the first steps toward establishing credit. ‘a credit history.
Talk to Your Teen About Responsible Credit Card Use, why a credit card is different from a debit card, how interest works, and how to read a credit card offer or statement. Open discussion and a willingness to approach it without judgment is a good way to prevent your teenager from surreptitiously asking for a credit card behind your back after he turns 18. It is also a good way to prevent him from going into deep debt before he has a lot of income.
Even if you think your teenager isn’t ready to manage their own money, it’s important to start letting them practice small independence steps, even with very small amounts of money. Ideally, however, you will have started to tackle financial issues early on and progress towards understanding and self-reliance so that you can be sure that your teenager has at least some basic money management skills, even when it comes to money management. ‘this is still a work in progress.